Q. What are the best ways to afford a home in an expensive market like Toronto or Vancouver?
Get creative. You probably can’t afford your dream home right away, but by getting your foot in the door of the real estate market with a condo or townhouse, you can start building up equity and move to your dream home eventually.
Q. What are the pros and cons of having a rental income suite in your home?
– You can pay off your mortgage in about half the time.
– A rental income suite is a safety net in case you lose your job.
– Once your mortgage is paid off, you can use the income to start saving towards your next goal like early retirement.
– You have to share your personal space.
– You’re on call 24/7 if something goes wrong like a burst pipe.
Q. What three things can a person do to increase the amount they can borrow?
– If you’re not buying with a partner, consider buying with family or friends.
– If your parents are in the financial position, consider borrowing from the Bank of Mom and Dad.
– Keep your credit score in good standing by paying your bills in full and on time.
Q. Are you an advocate of having a co-signer?
It can work sometimes. Just remember this arrangement isn’t forever. Make sure each party understands their responsibilities when someone wants to sell.
Q. Now that you’ve paid off your mortgage, have you shifted your efforts to saving for retirement? Why?
Yes. A paid off home is only the first step in achieving financial freedom. It’s still important to save money to live well in retirement.
Q. What are the top three tips you have for new homeowners?
– Don’t buy too much house. This can leave you “house rich,” but “cash poor” with little money to save, let alone have fun.
– Don’t forget to budget for closing costs. Budget 1.5% to 4% of your home’s purchase price towards closing costs, such as home inspection, land transfer tax and real estate lawyer fees.
– Set your mortgage-free date. Figure out when you want to burn your mortgage and how you’re going to achieve it.
Article by MeVest Contributor Sean Cooper – Sean Cooper is the author of Burn Your Mortgage, a Financial Journalist and Personal Finance Expert, living in Toronto, Ontario. He paid off his $255,000 mortgage in only three years. Follow him on Twitter @SeanCooperWrite and read his blogs on his personal website: http://www.seancooperwriter.com/